Correlation Between Aryzta AG and Artisan Consumer

Can any of the company-specific risk be diversified away by investing in both Aryzta AG and Artisan Consumer at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Aryzta AG and Artisan Consumer into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aryzta AG PK and Artisan Consumer Goods, you can compare the effects of market volatilities on Aryzta AG and Artisan Consumer and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Aryzta AG with a short position of Artisan Consumer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aryzta AG and Artisan Consumer.

Diversification Opportunities for Aryzta AG and Artisan Consumer

0.64

Correlation Coefficient

Aryzta AG  Artisan Consumer

Poor diversification

The 3 months correlation between Aryzta and Artisan is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Aryzta AG PK and Artisan Consumer Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Consumer Goods and Aryzta AG is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Aryzta AG PK are associated (or correlated) with Artisan Consumer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Consumer Goods has no effect on the direction of Aryzta AG i.e., Aryzta AG and Artisan Consumer go up and down completely randomly.

Pair Corralation between Aryzta AG and Artisan Consumer

Assuming the 90 days horizon Aryzta AG PK is expected to generate 0.49 times more return on investment than Artisan Consumer. However, Aryzta AG PK is 2.05 times less risky than Artisan Consumer. It trades about -0.12 of its potential returns per unit of risk. Artisan Consumer Goods is currently generating about -0.21 per unit of risk. If you would invest  90.00  in Aryzta AG PK on August 31, 2024 and sell it today you would lose (7.00) from holding Aryzta AG PK or give up 7.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Aryzta AG PK  vs.  Artisan Consumer Goods

Aryzta AG PK

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aryzta AG PK has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Artisan Consumer Goods

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Artisan Consumer Goods are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Artisan Consumer unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aryzta AG and Artisan Consumer

The main advantage of trading using opposite Aryzta AG and Artisan Consumer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aryzta AG position performs unexpectedly, Artisan Consumer can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Artisan Consumer will offset losses from the drop in Artisan Consumer's long position.

The idea behind Aryzta AG PK and Artisan Consumer Goods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.